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The European Union declared they will match the United States' steel tariffs, increasing to double taxes on foreign steel to fifty percent in a move described as "an existential threat" to the sector in the UK.

Major Challenge for UK Steel Exports

With eighty percent of British exports destined for the EU, this policy shift poses the British steel sector's biggest ever challenge, as stated by the industry association speaking for the sector.

European Commission Proposals and Rules

In its plan presented to the EU legislature on Tuesday, the EU executive additionally suggested cutting the existing quota for tariff-exempt steel and requiring foreign suppliers to disclose where the steel was melted and poured to stop China diverting exports through other countries.

The European steel industry faced potential collapse – we are protecting it so that investments can be made, reduce emissions, and become competitive again.

Replacement of Current Framework

The proposals are designed to replace a quota system that has been in operation for the past seven years and which is due to expire in 2026 and is now seen as not fit for purpose. To do nothing could have been "fatal" for the industry, a European official said.

Sector Reaction and Warnings

Nevertheless, Gareth Stace, head of the industry body British Steel, stated EU increasing duties would pose "the most severe challenge the British steel sector has ever faced".

He called on the UK authorities to "acknowledge the critical necessity to put in place domestic protections to protect" the British steel sector – which is affected by a 25% tariff from Trump recently – from the threat of vast quantities of global steel redirected from US and European markets.

This surge in foreign steel "might prove terminal for numerous steel companies.

Labor and Government Pressure

Alasdair McDiarmid, assistant general secretary at labor union Community, said the new measures posed "a survival risk" to UK steel.

Unions and industry leaders called on Keir Starmer to start negotiations immediately with the European Union on country-specific tariff exemptions, noting that the United Kingdom was now the European Union's primary export market.

Industry Background

Sector representatives in the European Union have also been warning for several months that the European steel sector confronts being "eliminated" through the increased duties on American market shipments combined with high energy costs and low-cost Chinese imports.

Steel on both sides of the Channel is described as a foundational industry, supplying elemental components in products ranging from building frameworks, renewable energy equipment and railways to dishwashers and cutlery.

Implementation and Next Steps

These proposals require approval by EU nations and the EU legislature, with the European Commission president calling on national governments and MEPs to act fast in support of the proposal.

If the plan is ratified, the EU will cut its current duty-free quota by 47% to 18.3m tonnes a annually, a volume previously recorded in 2013. It will impose a fifty percent duty on foreign steel beyond the quota and oblige countries exporting into the bloc to state where the steel was melted and poured to avoid bypassing of the measures.

Exemptions and Global Partnerships

These European nations will be exempt from tariff quotas or tariffs because of their close trading relationship in the European Economic Area, the EU has said.

In addition to these measures, the EU is pursuing a "steel partnership" with the United States to ringfence their respective economies from excess production.

The European Union must take immediate action, and decisively, before operations cease in large parts of the EU steel industry and its supply networks.